Federal Court of Australia

Vines (Trustee), in the matter of the Bankrupt Estate of Mitchell v The Edge TC Pty Ltd (No 5) [2026] FCA 4

ORDERS

THE COURT ORDERS THAT:

1.    Paragraph 1 of the interim receivers' amended interlocutory application filed on 1 August 2025 is dismissed.

2.    The Court confirms that the interim receivers' remuneration and costs of and incidental to the interlocutory application form part of the remuneration and expenses referred to at paragraph 8 of the orders made on 25 October 2024.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

JACKSON J:

1    On 25 October 2024, on an urgent basis, Feutrill J of this Court appointed Richard Albarran and Brent Kijurina of Hall Chadwick to be interim joint and several receivers (Receivers) of the property of various companies and trusts associated with Sam Mitchell, who is an undischarged bankrupt. Among the assets to which the Receivers were appointed were the assets of the first respondent, The Edge TC Pty Ltd (TETC) and of the second respondent, Wealthcheck Finance Pty Ltd (WFP). There is reason to believe that TETC acts as trustee of the Edge Family Trust (TEFT); although that is potentially an issue in the proceeding as a whole, I will assume for the purposes of this application that it is so. On 15 November 2024, Feutrill J confirmed that the Receivers were appointed as interim receivers of the assets of TEFT.

2    The Receivers now seek a direction from the Court that they would be justified in settling a particular proceeding in the Supreme Court of Queensland (Queensland Proceeding) on terms that they are paid $190,680.59 with no order as to costs.

3    Certain other respondents submit that the direction sought should not be made. They are the fourteenth respondent, Andrea Miller, the seventeenth respondent, Robin Mitchell, and the twentieth respondent, Wendy Mitchell. Andrea Miller is Sam Mitchell's wife, Robin Mitchell is his father and Wendy Mitchell is his mother. These three are the only active respondents who have filed a notice of address for service in the proceeding; I will call them the Interested Respondents. They are all represented by the same law firm and counsel. The Interested Respondents claim, and the Receivers do not dispute, that they have an interest in the outcome by reason of their positions as beneficiaries of TEFT. At the time of two hearings on the matter, the thirteenth respondent, John Thomson, also claimed to be interested in the outcome of the Receivers' application, but he has since filed a submitting notice (save as to costs).

4    For the following reasons, I decline to make a direction as sought.

Background

5    The appointment of the Receivers as interim receivers of the assets of TETC, TEFT and WFP, among other entities, was made on the application of Matthew Vines, who at the time was Sam Mitchell's sole trustee in bankruptcy. Mr Vines raised concerns that assets of entities in which the bankrupt estate may have had an interest were in jeopardy. The appointments were made under certain provisions of the Bankruptcy Act 1966 (Cth), the Insolvency Practice Schedule (Bankruptcy) (being Sch 2 to the Bankruptcy Act), and the Federal Court of Australia Act 1976 (Cth).

6    In broad terms, the purpose of the appointment was to protect the relevant assets for the benefit of the bankrupt estate. Under the orders made on 25 October 2024, the Receivers were appointed 'for the purpose of identification, preservation and securing' of the relevant property 'in aid of the Trustee and for the ultimate benefit of creditors of the estate of the Bankrupt'.

7    While the Receivers were not appointed under the Corporations Act 2001 (Cth), for convenience the Court's orders conferred specific powers by reference to certain sub-paragraphs of s 420 of that Act, and the powers given to receivers and managers appointed under the Act. The Receivers thus have power, among other things, to 'bring or defend any proceedings or do any other act or thing in the name of and on behalf of the corporation' (Cf. s 420(2)(k)). However, they were not given any express power to compromise proceedings, or more broadly to dispose of assets, and the orders make it clear that their powers do not extend to the sale of any relevant property without the prior leave of the Court.

8    About two months before the initial appointment of the Receivers in October 2024, WFP had commenced the Queensland Proceeding against O'Shea and Partners Lawyers Pty Ltd (O'Shea Partners) and O'Shea and Associates Services Pty Ltd (O'Shea Services, together, O'Shea). The statement of claim is brief and simple. Essentially, WFP claims to be entitled to be paid a sum of $381,361.19 which O'Shea Partners holds in trust for it. WFP claims that on 10 July 2024, it directed O'Shea Partners to disburse the trust funds to it. It seeks a declaration that O'Shea Partners does not have a statutory or equitable lien over the funds. It also claims interest and costs.

9    O'Shea filed a defence, as well as a counterclaim against TETC in its capacity as trustee for the TEFT, which thereby became a party. The defence is brief and simple too, but the counterclaim is not. (In many, but not all, of the matters discussed below TETC acted in its capacity as trustee for TEFT. However, nothing turns on this, and accordingly, I will not differentiate between TETC acting in its own capacity and as trustee for TEFT.)

10    The matter essentially turns on the counterclaim. In it, O'Shea rely on something they call the 'Wealthcheck Finance Payment Agreement', as well as certain alleged equitable charges. O'Shea's allegations may be summarised as follows:

(1)    In October 2021, O'Shea Services entered into a written Independent Contractor Agreement with Wealthcheck Management Pty Ltd (WMP), another company which was then controlled by Sam Mitchell. O'Shea Services was to provide non-legal consulting services to WMP in return for fees of $250,000 plus GST. It is pleaded that in about May 2022 this was varied to $450,000 plus GST per annum.

(2)    As at March 2024, under this agreement, WMP was indebted to O'Shea Services for $165,000 (inclusive of GST), and was in default in payment.

(3)    As at May 2024, and at the time of the counterclaim, WMP and certain other entities controlled by Sam Mitchell were also indebted to O'Shea Partners for $216,361.19 (inclusive of GST) for legal services rendered.

(4)    In March 2024, TETC and O'Shea entered into an agreement referred to as the 'Edge TC Payment Agreement' whereby O'Shea Partners would act for TETC in relation to the sale of its interest in Wonga Ag Five Pty Ltd as trustee for the Wonga Ag Five Unit Trust (Wonga) which owned a cattle station. According to O'Shea, they agreed to act on condition that the $2 million to be realised from the sale would be paid into O'Shea Partners' trust account and used to pay the debts totalling $216,361.19. This agreement is said to have been formed by an email dated 28 March 2024 from Sam Mitchell to a representative of O'Shea, Craig Smith, and a telephone conversation on that day between Sam Mitchell and Mr Smith.

(5)    On 17 May 2024, by an email from Sam Mitchell, TETC instructed O'Shea Partners to transfer the proceeds of the sale of Wonga to a bank account in the name of WFP. It would appear that at that time, O'Shea Partners was holding the proceeds in trust for TETC. O'Shea Partners did not fully comply with the instruction. Instead, TETC, WFP and O'Shea are said to have entered into the Wealthcheck Finance Payment Agreement mentioned above. Under it, the Edge TC Payment Agreement was rescinded, the Wonga sale proceeds were to be credited to WFP rather than TETC, and WFP agreed to pay the debts owed to O'Shea (as described at (2) and (3) above) from the proceeds. This agreement is said to have been entered into orally in a conversation between Sam Mitchell and Mr Smith.

(6)    O'Shea Partners then credited the Wonga sale proceeds in its trust account to WFP.

(7)    WFP then instructed O'Shea Partners to pay $620,000 out of the trust account to a company called Wealthcheck Financial Services Pty Ltd, and the balance to a bank account in WFP's name. O'Shea Partners made the $620,000 transfer as requested and paid an amount of $923,433.33 to a bank account in WFP's name. But it retained $381,361.19, being the full amount of the debts said to be owing to O'Shea as described in (2) and (3) above. (These figures also reflect a payment of $75,205.48 out of the sale proceeds to a third party, which needs not be explained.)

11    In essence, then, O'Shea claim that they are entitled to retain for their own benefit the $381,361.19 they hold in trust. It will be convenient to refer to this amount as the Disputed Funds.

12    HWL Ebsworth act for the Receivers in relation to the Queensland Proceeding. In March 2025, Mr Kijurina caused an in-principle commercial settlement of the proceeding to be negotiated with O'Shea. This is documented in an unexecuted heads of agreement. It is subject to court approval. As will be explained below, the heads of agreement were later revised, and remain unexecuted. The terms of the settlement are also documented in correspondence between HWL Ebsworth and O'Shea during March 2025.

13    The parties to the heads of agreement will be TECT, WFP, O'Shea Partners and O'Shea Services. Its terms are that O'Shea Partners will pay half of the Disputed Funds to HWL Ebsworth's trust account. The proceeding will then be discontinued, and this will constitute 'a complete resolution of the Proceedings as a whole, including any claim for costs'. On that payment being made, O'Shea Partners will be at liberty to deal with the remaining half of the Disputed Funds as they wish.

The Receivers' reasons for seeking directions

14    Mr Kijurina affirmed an affidavit on 16 July 2025 in which he deposed as to the reasons why the Receivers consider it appropriate to seek a direction from the Court. He acknowledges that the orders appointing the Receivers do not give them the express power to compromise proceedings, and they confer no power of sale without the prior leave of the Court. Any agreement releasing a claim and permitting O'Shea to do as it wishes with a sum of money claimed by WFP might be characterised as a disposal of an asset. Mr Kijurina is therefore concerned that the Receivers may not have the power to settle or compromise the Queensland Proceeding without the approval of the Court.

15    Mr Kijurina also says that he is conscious, in effect, that as interim receivers, the Receivers' appointment is temporary, whereas a compromise of the proceeding will have a permanent legal consequence that will impact TEFT. Also, he points out that he may have to make a decision as to whether any funds received as a result of the compromise should be paid to WFP or to TETC.

16    In his affidavit of 16 July 2025, Mr Kijurina advances the following reasons why he considers that the settlement just described 'is the best resolution' of the Queensland Proceeding.

(1)    There is always uncertainty and risk in litigation, and the settlement gives certainty and allows access to the funds more quickly.

(2)    The amount in dispute is not substantial such that, according to Mr Kijurina, 'there is a real risk that the costs of pursuing the litigation (both in terms of legal costs as well as the costs of the Interim Receivers) will substantially diminish the potential maximum return if the litigation is successful'. But his affidavit does not provide an estimate of either the legal costs or the Receivers' likely costs (an estimate of legal costs appears in a later confidential affidavit of a solicitor, Warren Jiear).

(3)    Mr Kijurina's affidavit of 16 July 2025 also says:

the efforts of the Interim Receivers to obtain the cooperation of Mr Sam Mitchell and other relevant office holders, in relation to relevant financial records to assist in this process have had very limited success. Since our appointment in October 2024 onwards, multiple written requests for financial records and [a] Report on Company Activities and Property were sent to Mr Michell, Ms Andrea Miller and Mr Thomson. …. I do not know the current whereabouts of Mr Mitchell, other than I believe he may be in the United States of America[.]

(4)    Mr Kijurina further says that efforts to obtain the financial records of WFP and TETC have been unsuccessful, other than certain records identified in an earlier report of the Receivers to the Court. He says that financial records they do have are contradictory. No accounting record he has seen explains why the benefit of the sale proceeds of nearly $2 million appear to have been transferred from TETC to WFP.

(5)    Mr Kijurina took and considered advice from HWL Ebsworth which is before the Court and is the subject of confidentiality orders. This is before the Court in a confidential affidavit of Mr Jiear sworn on 16 July 2025.

The basis of the opposition to the directions sought

17    The Interested Respondents rely on an affidavit sworn by their then solicitor, Stephen Mullette, on 4 September 2025. Mr Mullette has practised in commercial litigation and insolvency for some 27 years. He has read the materials filed in the Court concerning the Receivers' application, save that, pursuant to orders made on 13 August 2025, the version of Mr Jiear's affidavit that was made available to Mr Mullette was redacted to remove legal advice.

18    On the basis of what he has read, Mr Mullette expresses the opinion that 'only' three witnesses will be called to give evidence: Sam Mitchell, Mr Smith and a principal of O'Shea Partners, Tom O'Shea. Mr Mullette says that 'only' two conversations between Sam Mitchell and Mr Smith are in issue. He says that 'there is only a small bundle of correspondence relevant to the issues in dispute in the proceeding' and that 'discovery in the proceeding appears to be within a narrow compass'. He considers that the trial of the Queensland Proceeding would not take longer than one to two days. Mr Mullette thus provides an estimate, with a breakdown, that it will cost $48,300 to prosecute the matter to completion.

19    Mr Mullette also provides an opinion, said to be based on the documents he has read and his 'experience as a litigation expert' that O'Shea Partners have 'improperly retained the [Disputed Funds] in their trust account'. If the alleged Wealthcheck Finance Payment Agreement is unenforceable or was not made, then O'Shea Partners would not be entitled to retain the money and it should be returned to WFP, and O'Shea Partners should pay all legal costs, potentially on an indemnity basis. No explanation or reasoning to support these conclusions is provided. Mr Mullette concludes by expressing the opinion that the proposed settlement is unreasonable, as the 50% discount on the claim 'would appear to me excessive in the circumstances' upon balancing the strength of WFP's case and the estimated legal costs.

A further issue arises

20    The Receivers' application for directions was listed for hearing on 23 September 2025. At that hearing, I asked whether the terms of the proposed settlement might release O'Shea, not just from the claims articulated in the statement of claim, but also from potential further claims by TETC, say, or the beneficiaries of TEFT, in respect of the transfer of funds from TETC to WFP, which is not satisfactorily explained by the evidence before the Court. The question arose because of the breadth of the release contemplated by the draft heads of agreement as they then stood. They provided that the settlement would 'constitute full and final satisfaction of all and any claims between the parties in the Supreme Court Proceedings in connection to the dispute pleaded in the Supreme Court Proceedings'.

21    That is in a context where there is a question as to which entity formerly under the control of Sam Mitchell is entitled to the funds. They appear to have been originally deposited on behalf of TETC, and to have been held on trust for it. The circumstances surrounding the subsequent transfer of the funds to be held on behalf of WFP are obscure, as is the proper legal basis for the transfer, if any. It would not be appropriate to be definitive about the claims I have mentioned in the preceding paragraph (Potential Claims), either in the sense of describing them too precisely or in the sense of expressing any view that they are meritorious. It is sufficient to say that, in circumstances where Sam Mitchell may have owed fiduciary duties to TETC, TETC likely owed fiduciary duties to the beneficiaries of TEFT, and O'Shea likely owed fiduciary duties to TETC, there would be room to allege that the transfer, out of TETC's name, of approximately $2 million, without any apparent explanation, potentially involved breaches of some of those duties, and/or knowing participation in such breaches, on the part of O'Shea. Feutrill J noted similar concerns in his reasons for the orders of 25 October 2025: Vines, in the matter of the Bankrupt Estate of Mitchell [2024] FCA 1276 at [51]-[53]. As well as the transfer itself, the agreement alleged by O'Shea Partners as described at [10(4)] above may also have involved a breach.

22    At the hearing on 23 September 2025, counsel for the Receivers properly accepted that he was not in a position to address the Court on that matter, and that it was a matter that needed to be addressed. The hearing was therefore adjourned to give the Receivers and the Interested Respondents the opportunity to file further evidence and submissions on the subject.

23    The Receivers then filed evidence to the effect that they and O'Shea are prepared to sign a revised heads of agreement whereby the scope of the proposed settlement has been narrowed to 'a complete resolution of the Proceedings as a whole, including any claim for costs'. O'Shea has said in correspondence that the heads of agreement do not replace, supersede or terminate 'the settlement agreement formed by the exchange of correspondence concluding 21/3/25'. That exchange of correspondence is in evidence, and is consistent with the narrower scope of settlement for which the revised heads of agreement provide. That correspondence speaks of 'a full resolution of the Proceedings as a whole, including costs', that being a reference to the Queensland Proceeding.

24    As the Interested Respondents pointed out, the correspondence between HWL Ebsworth and O'Shea in October 2025 which led to O'Shea's confirmation of the narrower scope of the releases inherent in the settlement did not articulate the possible claim against O'Shea, described in broad terms above, which led to the adjournment of the hearing of 23 September 2025. Rather, in a letter dated 3 October 2025 from HWL Ebsworth to O'Shea Partners, all that was said was, relevantly:

4.    The Court's consideration of the Interim Receiver's application of directions is part-heard at this stage. His Honour has raised a query with respect to the Heads of Agreement.

5.    In drafting the proposed Heads of Agreement, it was not our intent to go beyond the scope of the proceedings. His Honour Justice Jackson has raised a potential query that the unsigned Heads of Agreement could arguably extend beyond settling the claim the subject of the Proceedings - ie the dispute over the sum of $381,361.19 currently held in your trust account.

6.    To assist in this regard, we attach a proposed varied Heads of Agreement, with an amended Paragraph 4 for your consideration.

25    The letter attached the amended draft heads of agreement in the form described above. This is the letter to which O'Shea gave the response described immediately above.

26    The Interested Respondents did not make clear what, if anything, followed from this alleged lack of disclosure. They did not, for example, rely on the desirability of parties 'putting their cards on the table' and 'coming clean' recently restated in Madden (Receiver) v Mining Standards International Pty Ltd [2025] FCAFC 142 at [178]-[180] (Banks-Smith, Kennett and Wheatley JJ). In oral submissions the Interested Respondents disavowed any allegation of abuse of process, save to the extent that it might give rise to an Anshun estoppel (Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589).

27    That does not necessarily preclude taking the alleged lack of disclosure into account since, as is about to be explained, the Court is currently exercising a supervisory rather than adversarial jurisdiction: see Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [80]; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand [2006] NSWCA 160; (2006) 66 NSWLR 112 at [9] (Beazley and Giles JJA). But in the end I have not found it necessary to pursue this point as, for the reasons explained below, a concern that the Potential Claims may be barred by an Anshun estoppel raises sufficient doubt about the prudence of the settlement to lead me to decline to give the directions sought.

Judicial advice to receivers - power and principles

28    The Receivers and the Interested Respondents agree that the Court has power to give judicial advice to the Receivers in circumstances such as the present. I am satisfied that is so; unsurprisingly, the Court's inherent equitable power to give directions extends to receivers it has itself appointed and who act as its officers: see Francis (Trustee), in the matter of Fotios (Bankrupt) v Helios Corporation Pty Ltd [2022] FCA 199 at [16] (Colvin J) applying ASIC v Commercial Nominees [2002] NSWSC 576 at [11] (Barrett J).

29    Inevitably, the Court has a discretion as to whether to exercise that power in a given case. In the exercise of that discretion, the interests of the creditors of the bankrupt estate should be treated as being of paramount importance: see, in the context of directions to trustees, Re Rosewood Research Pty Ltd [2014] NSWSC 449 at [30] (Darke J).

30    In the exercise of the discretion it is appropriate to have regard to principles developed in analogous contexts such as directions to administrators, liquidators and receivers appointed under the Corporations Act. The Court may give directions on a legal issue of substance or procedure, including an issue of power, propriety or reasonableness: Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 at [65] (Goldberg J). The function of the Court is not to give advice as to how the Receivers should act, but rather whether there is legal justification for their proposed course of action: Re Mirabela Nickel Ltd (receivers and managers appointed) (in liq); Ex Parte Madden [2018] WASC 335 at [89(4)] (Vaughan J), applying Preston, in the matter of Sandalwood Properties Ltd [2018] FCA 547 at [51]-[54], [67] (Colvin J).

31    It is well recognised that the decision as to whether to compromise a legal proceeding can be the subject of a direction of this kind, even though it also involves questions of commercial judgment: Re One.tel Ltd [2014] NSWSC 457 at [49] (Brereton J). The role of the court is one of oversight, where the Court will be concerned to ensure that the decision to compromise a claim 'is not based on impropriety, bad faith, an error of law or principle', and that there are no grounds for doubting the prudence of the decisions: OPS Screening & Crushing Equipment Pty Ltd v Gold Valley Iron Pty Ltd (In Liq) (No 2) [2023] WASC 109 at [14] (Tottle J). It will give due regard to the commercial judgment of an experienced insolvency practitioner: Re One.tel Ltd at [28].

32    It has been said in the case of directions to trustees that in the usual case where the trustees have obtained a legal opinion in favour of the proposed settlement, all the court decides is whether it is reasonable for them to act on that opinion: Grain Technology Australia Ltd v Rosewood Research Pty Ltd (No 2) [2019] NSWSC 1744 at [20]. For myself, I respectfully doubt that the discretion of the Court is confined to that extent, but there is no doubt that in the usual course and in the absence of manifest deficiencies the Court will give the considered opinion of the applicant's legal advisers considerable weight in determining whether the proposed course of action is justified.

Consideration

Overview of the Queensland Proceeding

33    The Queensland Proceeding is at an early stage. Pleadings have not closed. There is a defence and counterclaim, but no defence to the counterclaim has been filed. Given the nature of the claims and counterclaims, it can be expected that discovery will be necessary, although it may not be extensive.

34    At this early stage it is not possible to estimate with any certainty how long the trial will be, how many witnesses will be called and how long their cross-examinations will be. Further uncertainty arises from the likelihood that findings about the alleged Wealthcheck Finance Payment Agreement are likely to depend on evidence given by Sam Mitchell and Mr Smith about conversations they had.

35    In that respect, it is appropriate for the Receivers to have regard to difficulties they have had in obtaining any witness statement from Sam Mitchell. They have adduced evidence of correspondence between their solicitors and Sam Mitchell and his solicitors requesting assistance in the Receivers' investigations into the affairs of WFP and TETC, specifically demands for the books and records of those companies. They have also adduced evidence of similar correspondence in the time since the hearing of 23 September 2025. Also, Sam Mitchell appears now to live in the United States of America and has not indicated any intention to return to Australia. That itself may create difficulties in obtaining and presenting his evidence.

36    The correspondence just mentioned led to a Microsoft Teams meeting on 17 October 2025 which Sam Mitchell attended but, because the solicitor representing him did not attend, the meeting was terminated without any evidence being taken. I was taken to an automatically generated transcript of the meeting which suggests that Sam Mitchell and the solicitor for the Receivers who was conducting the meeting, Melinda Stanley, may have been at cross purposes about the scope of the proposed interview; Ms Stanley appears to have intended to confine it, appropriately, to the Queensland Proceeding, while Sam Mitchell, understandably, appears to have interpreted her as saying that she wanted to ask questions about a different set of applications in which the trustees in bankruptcy and the Interested Respondents are involved.

37    It is not clear what has happened since then, in terms of speaking to Sam Mitchell. But the tone of the correspondence between the Receivers and Sam Mitchell and those representing him is adversarial. While the unsuccessful Microsoft Teams meeting of 17 October 2025 suggests that Sam Mitchell was open to cooperating with the Receivers in relation to the Queensland Proceeding, it also shows how wider issues concerning the receiverships and the bankruptcy make that fraught with difficulty. While it is not possible to rule out Sam Mitchell's cooperation in future, the course of the evidence suggests that the Receivers are right to be concerned about whether they will receive that cooperation to permit them to prosecute the Queensland Proceeding properly and efficiently.

38    Returning to the issues in the Queensland Proceeding, an affidavit Sam Mitchell affirmed on 4 September 2025 raises further questions. He says that the invoices to WMP by O'Shea Services have been disputed since December 2023 and remain disputed. He says that the invoices by O'Shea Partners to the various entities have also been disputed since they were rendered and remain in dispute. Since those invoices form the basis of part of O'Shea's claim to the moneys, that raises a potential further field of dispute, on which witness evidence may be required, and where the discovery can be expected to be more extensive than that relating to the formation of the alleged payment agreements between O'Shea and TETC and then O'Shea and WFP respectively.

39    Counsel for the Receivers also pointed to further potential complications that may emerge if TETC joins in the claim to allege breaches of fiduciary duty arising out of the apparent transfer of the Wonga sale proceeds out of its trust account with O'Shea Partners. These are raised in the position paper as a potential basis to defeat O'Shea's claims for equitable relief. They would be allegations of the kind that are broadly outlined above in connection with the Potential Claims.

40    All in all, the complicated nature of the issues raised by the counterclaim, as well as the uncertain state of the evidence and the possibility of disputes over invoices rendered by O'Shea, make it likely that the proceeding will not be straightforward to take to trial, and it may be relatively costly compared to the value of the subject matter at stake, being a little less than $400,000.

The Interested Respondents say that the proposed settlement is not reasonable

41    Setting Anshun estoppel aside for the moment, the points relied on by the Interested Respondents in order to oppose the direction sought are unpersuasive.

42    The Interested Respondents spent some time and effort tracing through the correspondence between O'Shea and Sam Mitchell as well as the affidavit provided by Sam Mitchell in order to show that WFP is entitled to the money claimed. But it is not the place of the Court on an application of this nature to examine those matters in forensic detail and make findings about the likelihood of success. It is enough to say that there is nothing in the evidence which makes TETC/WFP's case appear so compelling that it is unreasonable for the Receivers to seek to compromise it.

43    To conclude otherwise would be to make a baselessly optimistic assumption that Sam Mitchell's evidence will be fully accepted by the Queensland Supreme Court over that of Mr Smith. It may be that the contemporaneous correspondence is more consistent with Sam Mitchell's account than that of Mr Smith. On the other hand, it is inherently probable that O'Shea, a law firm claiming to be owed nearly $400,000 by companies associated with Sam Mitchell, would have attempted to negotiate a legally binding payment arrangement before releasing some $2 million in funds. It is simply impossible to say at this point who is likely to be believed, meaning that the optimism the Interested Respondents display about the strength of WFP's case is misplaced.

44    Mr Mullette's costs estimate displays similar optimism. He only estimates the costs of trial, on the assumption that it will be brief and straightforward. The total costs he estimates at $48,300. This does not provide for any interlocutory steps, in a situation where pleadings are not closed and there will be a need, at least, for a defence to the counterclaim and discovery. It takes no account of the possibility that the invoices will be disputed, requiring more extensive and detailed evidence about dealings between Sam Mitchell and O'Shea and work they have done. More broadly, I would be surprised if any contemporary commercial trial in a superior court costs as little as that to run. Experience, together with the complications in the matter outlined above, indicate that this optimism, too, is unfounded.

45    The Interested Respondents also rely on the strength of the position put on behalf of WFP and TETC disclosed in a confidential position paper prepared by HWL Ebsworth on behalf of the Receivers in relation to a mediation of the Queensland Proceeding. With respect, it is obvious that the position paper was intended to put pressure on O'Shea to go to mediation with a view to settling the dispute without having to hold a contested hearing. Its last paragraph says as much. In other words, the paper was a piece of advocacy. For the Interested Respondents to now maintain that this Court should accept the position paper as a basis to say that the claim should not be settled on a 50/50 basis as proposed is to attribute a high degree of naïveté to all concerned.

46    The Interested Respondents submit that the fact that litigation is inherently risky does not warrant entering into an agreement to split the Disputed Funds 50/50. But even if that were so, the function of the Court is not to decide what the correct or appropriate decision is in all the circumstances. The function of the Court is to determine whether the Receivers' proposed settlement is unreasonable or otherwise affected by impropriety, bad faith, an error of law or principle. Save as to unreasonableness, the Interested Respondents allege none of those things against the Receivers.

The HWL Ebsworth legal opinions

47    Two opinions by the Receivers' solicitors, HWL Ebsworth are in evidence. The first is dated 1 July 2025 and provides a comprehensive opinion about the prospects of the Queensland Proceeding and the risks inherent in prosecuting it. The second is dated 11 September 2025 and is an updated opinion which takes into account the affidavits of Mr Mullette and Sam Mitchell that are mentioned above. The first opinion concludes that the proposed settlement is reasonable and the second opinion says that the two affidavits do not change that conclusion.

48    The opinions are the subject of suppression orders so it is not appropriate to say much more about them. It can be said, however, both opinions present as detailed, thorough and considered. It can also be said that they do not overlook the reasons given in the position paper as to why O'Shea may face difficulties in establishing the existence of the alleged 'payment agreements'.

49    Subject to an important caveat, it is reasonable for the Receivers to rely on these opinions concerning the settlement of the claims currently made in the Queensland Proceeding. The caveat is this: while the opinions do not overlook the Potential Claims, they do not address the impact of the proposed settlement on those claims. They only address the reasonableness of the settlement in the context of the claims that are presently pleaded in the proceeding.

50    Two further related issues about the opinions should be addressed at this point. First, as has been said, suppression orders have been made over them. It was necessary in the interests of the administration of justice to supress the opinions, because it is in the interests of justice that applicants for directions in situations such as the present are able to put legal opinions about the merits of litigation before the Court without being concerned that the opinions will lose their confidentiality and the legal professional privilege attaching to them, so that they would become available to their opponents in the relevant litigation. That may provide opponents with an unfair forensic advantage, which could well undermine the conduct of the proceeding and the receiverships: see the principles canvassed in Kelly (Liquidator), in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Loo (No 2) [2022] FCA 1078 at [40]-[49] (Markovic J). In those circumstances it is in the interests of the administration of justice that material of that nature be kept confidential until after the conclusion of Queensland Proceeding.

51    Second, while the Interested Respondents did not oppose that suppression order, they did submit that the confidentiality of the legal opinions was a matter that weighed against the exercise of the discretion to approve the proposed settlement. Their argument relied on Macedonian Orthodox Community Church at [57].

52    That case concerned an application by a trustee for judicial advice as to whether it would be justified in defending legal proceedings, where the applicant had put a legal opinion before the Supreme Court, and the Court of Appeal held privilege over that opinion had not thereby been waived. Beazley and Giles JJA held that while opposition to directions by persons who might be affected by them did not convert the application for judicial advice into an adversarial proceeding, there could be situations where the court would be assisted by the views of those affected persons: at [56]. While the court could not compel waiver of legal professional privilege over the advice, it could invite the applicant to make it available to the affected persons. It could also indicate to the applicant that unless it was prepared to make certain material available, 'then the advice that the Court was able to give might be qualified or limited because it would not have the assistance it might have been afforded had the affected persons had access to more material than the trustee was prepared to provide': at [57].

53    The Receivers did not disagree that this approach was open to the Court in principle, and I see no reason why it would not be open. But I do not consider that it is warranted on the facts here. The Interested Respondents submitted at the hearing on 23 September 2025 that if they had access to the HWL Ebsworth opinions, they would be able to assist the Court as to why the Receivers' views apparently changed from the strong ones expressed in the position paper to a decision that they should settle for half of the funds in dispute. But in my view the Court needs no real assistance as to that matter; it is readily explicable by the obvious fact that the position paper was intended to persuade O'Shea to compromise, while the decision to accept half of the fund in issue was the ultimate outcome of that – a compromise. It is doubtful that the Interested Respondents are in a position to provide any particular assistance, since none of them appear to have been involved in the events that have led to the Queensland Proceeding. In any event they have made fulsome submissions with the benefit of evidence adduced from Sam Mitchell as to the merits of WFP's position in the litigation.

54    I see no need to qualify the proposed judicial advice because the Interested Respondents have not seen the HWL Ebsworth legal opinions. Nor do I see any reason why the relatively commonplace event that the opinions have been kept confidential should weigh against the discretion to approve the proposed settlement.

The Potential Claims

55    The Potential Claims outlined above give rise to a further, important matter that must be given weight in deciding whether to approve the entry into the proposed settlement. It is whether the effect of the settlement will preclude the bringing of those Potential Claims in the future.

56    Again, it is not necessary to be precise in articulating what those claims might be. The Receivers did not suggest that the claims are so ill-defined and tenuous that they should be given no weight. That being so, all other things being equal, it would be undesirable for the settlement to be approved if its effect is that, in return for receipt of approximately $190,000, a claim of up to $2 million against O'Shea is lost. The Receivers have conducted no analysis, and received no advice, to indicate that this would be a reasonable settlement.

57    As described above, the Receivers have sought to address the point by varying the proposed heads of agreement to make it clear that the settlement will not effect a compromise of the Potential Claims. It will be recalled that the terms are that the Queensland Proceeding is resolved 'as a whole' and that this is narrower than the previous wording, which encompassed any claims 'in connection to the dispute pleaded in the Supreme Court Proceedings'.

58    The Interested Respondents do not contend that the new terms will effect a release of the Potential Claims. But they do submit that discontinuing the Queensland Proceeding will give rise to an Anshun estoppel that will preclude bringing the Potential Claims in the future. For that reason, they say, the proposed settlement should not be approved.

Anshun estoppel

59    In Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507, French CJ, Bell, Gageler and Keane JJ explained Anshun estoppel as one of three species of estoppel that operates in relation to judicial determinations, as well as final judgments rendered in other adversarial proceedings: at [21]. It operates 'as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law': at [21].

60    In Tomlinson at [22], their Honours went on to observe (most footnotes removed, emphasis added):

Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as 'cause of action estoppel'... The second form of estoppel is almost always now referred to as 'issue estoppel' ... The third form of estoppel is now most often referred to as 'Anshun estoppel', although it is still sometimes referred to as the 'extended principle' in Henderson v Henderson [(1843) 67 ER 313]. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a 'true estoppel' and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.

61    The Interested Respondents submit that if the Queensland Proceeding is settled on the terms proposed, it will be open to O'Shea to defeat any subsequent attempt to pursue one or more of the Potential Claims on the basis of Anshun estoppel. They submit, in effect, that O'Shea may establish that the Potential Claims are so connected with the existing subject matter of the Queensland Proceeding that it is unreasonable for one or more of the Potential Claims not to have been brought or resolved in that proceeding.

Can Anshun apply where the previous proceeding was discontinued?

62    I make no determination here that it would or would not be unreasonable to pursue any of the Potential Claims in the Queensland Proceeding. That would be difficult to do on a hypothetical basis and it is not necessary. The Receivers do not rest their opposition to the Anshun point on that basis. Rather, their main response to the point was a submission that it is a misapplication of the principle, because Anshun estoppel only operates where there has been a final determination in adversarial proceedings. At the hearing on 9 December 2025, counsel for the Receivers relied on Tomlinson at [21] and [22], as described and quoted above. Counsel for the Receivers submitted that since the proposed settlement will lead to the discontinuance of the Queensland Proceeding, there will be no binding determination and the Anshun principle will not apply.

63    The Receivers' submission finds some support in Tomlinson, and in Anshun itself. The holding in Tomlinson at [21] that the three relevant estoppels operate in the context of a final judgment having been rendered in adversarial proceedings other than judicial ones tends to confirm that the reference in [22] to 'the rendering of a final judgment in an adversarial proceeding' is an essential aspect of any of the estoppels, including Anshun estoppel. This is consistent with the judgment of Gibbs CJ and Mason and Aickin JJ in Anshun, which was in turn based on the dictum of Wigram VC in Henderson at 115 (ER 319). There, the Vice Chancellor states as a precondition to the operation of the principle that 'a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction': see Anshun at 598, 602.

64    However, the position disclosed by authorities decided in the Australian and English courts since Anshun is not so clear. Between them, the parties cited a large number of cases on the subject. Only three deal with the specific question of whether Anshun can apply when the previous proceeding was discontinued, and my researches have uncovered a fourth. I will discuss each of those cases shortly.

65    The rest of the cases cited by the parties went to the broader question of whether Anshun can arise when the court or tribunal in which the previous proceeding was brought did not make a determination of the merits, for example because of a consent judgment. The authorities cited are unanimous that it can arise in those circumstances. In Johnson v Gore Wood & Co (a firm) [2002] AC 1 at 32-33, 50 and 59 the House of Lords held that the Henderson principle can apply where the previous proceeding has been settled. This was followed in Australia on numerous occasions prior to Tomlinson: see e.g. R&J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 at [20] (Bryson AJ); Rojanasaroj v Rachan (No 2) [2011] WASC 271 at [39] (Corboy J); Whelan Kartaway Pty Ltd v Donnelly [2012] VSC 45 at [24] (Davies J); Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [136] (Bathurst CJ, Beazley P and Emmett JA agreeing).

66    Johnson, and most if not all of the other cases, just cited, proceed on the basis that Anshun estoppel is not a true estoppel but a species of abuse of process. That seems to be inconsistent with the High Court's approach in Tomlinson, as set out above. However Australian cases subsequent to Tomlinson continue to apply Johnson, or Ekes which itself applies Johnson, where the previous proceeding was compromised: see e.g. Livingstone v Mitchell [2020] NSWSC 1464 at [70]-[72] (Adamson J); Mandeville v Better Lending Pty Ltd [2021] SASCA 28; (2021) 139 SASR 1 at [113]-[146] (Doyle, Livesey and Bleby JJA). In Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118 at [34] Meagher JA (McColl and Leeming JJA agreeing) sounded a note of doubt about this approach, including after considering Ekes. But it does not appear that the Court of Appeal expressed a definitive view, on the point, because the true basis of its decision seems to have been that in the circumstances it had not been unreasonable for the appellant not to bring the claims that had been found by the primary judge to be barred by an Anshun estoppel: see [36]-[39].

67    I will now turn to the four authorities cited or identified by me which deal with the specific situation where the previous proceeding has been discontinued. It is necessary to keep in mind, however, that I am not making a binding inter partes determination of the issue. Rather, the question is whether the authorities give sufficient ground to doubt the reasonableness or prudence of the proposed settlement, so as to lead me to refrain from saying that the Receivers are justified in proceeding with it.

68    In Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431, the plaintiff, along with a related company, had commenced a proceeding against its insurers but the plaintiff obtained leave to discontinue. That was not on terms that involved any settlement with the insurers. The related company continued the proceeding to settlement, which resulted in orders disposing of its claim. After that (apparently) the plaintiff filed a notice of discontinuance in that proceeding. It then commenced a second proceeding against the insurers for indemnity for losses connected with the subject matter of the earlier claims.

69    At [36], Palmer J characterised Anshun estoppel as a category of abuse of process and held that it 'is concerned with the situation which arises when that plaintiff prosecutes a cause of action to its conclusion by judgment or settlement' (emphasis added). His Honour further held that:

The rationale for the doctrine in Henderson v Henderson, as developed by Anshun, has no application to the case where the plaintiff, or the plaintiff's privy, has commenced earlier litigation against the defendant, but has, with the Court's leave, discontinued that litigation rather than prosecuting it to a conclusion by judgment or settlement.

70    Given the factual context of this holding, his Honour appears to have been drawing a contrast, relevantly, between prosecuting 'a cause of action to its conclusion by … settlement' and a discontinuance for which a party unilaterally obtains leave, without any settlement being involved.

71    In Ward v Hutt [2018] EWHC 77 (Ch); [2018] 1 WLR 1789, the previous claim had been terminated during the trial. This happened after the testimony of the plaintiff, a liquidator, had not gone well during cross-examination. During an adjournment granted to permit him to consider his position, 'a notice of discontinuance was filed, and the claim came to an end': at [19]. While the liquidator agreed to pay indemnity costs to the respondents, it does not appear that this was pursuant to any agreement to compromise the matter. At [50]-[53] Paul Matthews J, sitting as a High Court judge, decided not to strike out a subsequent claim by the liquidator on the basis of the Henderson principle. After considering the speech of Lord Sumption JSC in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd (formerly Contour Aerospace Ltd) [2013] UKSC 46; [2014] AC 160, Paul Matthews J held that the Henderson principle was properly considered to be a rule of res judicata, meaning that it would not apply when the previous proceeding had been discontinued.

72    In Kurzyp v Kurzyp [2021] NSWSC 851, earlier family law proceedings had been determined after a settlement embodied in consent orders proving that 'declaration and notations' would be made in terms of a document that provided, among other things, for the wife's claim to be 'withdrawn'. At [168] Rees J characterised this as 'akin to a discontinuance' and emphasised that the earlier court had not made a determination of any issue between the parties. At [174] her Honour held that (emphasis added):

in order for the principles of Anshun estoppel to operate, the plaintiff must have prosecuted the earlier proceeding to its conclusion by final judgment or settlement. The principles have no application where that has not occurred, such as where the plaintiff merely discontinued the earlier proceeding: DA Christie Pty Ltd v Baker [1996] 2 VR 582 at 602; Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431 at [36]; Tomlinson at [22]. The wife did not prosecute the family law proceedings to a conclusion by final judgment or settlement but discontinued the proceedings. There is no Anshun estoppel.

73    This supports the Receivers' position in the present application, because Rees J appears to have considered that in settling the family law proceeding, the wife had 'merely discontinued' them, which appears to be a reference to the kind of unilateral discontinuance that occurred in Running Pigmy, one of the authorities cited in Kurzyp. But it is relevant in this regard that the settlement of the earlier family law proceeding seems to have occurred on the basis that the proper forum for the claim was in Poland, and there appears to have been an understanding that proceedings would continue there. As to the other authorities cited, in DA Christie the earlier proceeding had been determined contrary to the plaintiff on a limitation of actions point. There was therefore no determination of the merits of the claim. At 602 Hayne JA (Charles JA agreeing) held that Anshun and Henderson did not apply because there had been no 'earlier final decision' of the matter. This decision did not concern the arguably different situation of discontinuance. Tomlinson is cited presumably for the reference, discussed above, to the need for 'a final judgment in an adversarial proceeding'.

74    In Probert v The Estate of the Late Amiel Colin Christie (No 2) [2025] NSWSC 1041, certain proceedings had been settled in 2022 on the basis that upon certain steps being taken, consent orders for the discontinuance of the proceedings would be filed. A dispute arose about the terms of settlement which was heard and substantively determined in 2023, on terms that effectively required specific performance of the settlement agreement by way of the filing of the consent orders for discontinuance. The 2022 proceeding was then discontinued accordingly. The plaintiffs commenced fresh proceedings in 2024. The defendants relied on Anshun estoppel, among other things. Williams J held that Anshun could apply because, although the 2022 proceedings had been discontinued, this had been done pursuant to a settlement and was not a 'mere discontinuance' of the kind referred to by Rees J in Kurzyp: at [58]. Williams J also relied on Running Pigmy (and other cases cited above) in finding the distinction between settlement and unilateral discontinuance to be a relevant one.

75    It is not easy to reconcile all these authorities, and on an application of the present kind it is neither necessary nor appropriate to try to do so. It is enough to recognise the availability of at least two competing arguments. The first is that Henderson, Anshun and Tomlinson are high authority to the effect that an exercise of judicial power determining a dispute is a necessary precondition to Anshun, albeit Tomlinson does not go so far as to require there to have been a determination on the merits. For that reason, authorities such as Ekes entertaining Anshun estoppel in the absence of 'adjudication' may be consistent with Tomlinson, since a judgment entered by consent without consideration of the merits is still an exercise of judicial power. On that basis, settlement by way of consent orders entering judgment for a party may give rise to Anshun estoppel, while discontinuance, whether 'mere' or pursuant to a settlement agreed by the parties, will not be enough.

76    The second argument is that Australian courts, both before and after Tomlinson, have recognised a distinction between 'mere' that is, unilateral discontinuance, where there can be no Anshun estoppel, and discontinuance pursuant to a consensual settlement, where there can be. The cases in question are, in particular, Running Pigmy, Kurzyp and Probert. While Kurzyp seems to proceed on the basis that a discontinuance pursuant to a settlement can be a 'mere' discontinuance so that Anshun estoppel is not available, the circumstances there were quite particular. Running Pigmy and in particular Probert appear to proceed on the basis that Anshun estoppel can arise after a settlement that is effected by way of discontinuance. The English authority of Ward v Hutt seems to be consistent with this position, in that there was no Anshun estoppel where there had been no settlement. The several other authorities mentioned above which do not require 'adjudication' as a precondition are also consistent with it, albeit they do not directly support it because most if not all of them still involved consent judgments which are exercises of judicial power.

77    I incline towards the first of these two arguments, as it is the one that appears supported by High Court authority. But the apparent acceptance of the second argument by three judges of the Supreme Court of New South Wales shows that the contrary view is reasonably open. That is especially so in light of the broader acceptance that 'adjudication' is not necessary for an Anshun estoppel to arise.

Other issues

78    Although the point just addressed was the Receivers' main response to the Anshun argument, they raised a few other matters as well.

79    First, they suggested that the Interested Respondents had not articulated the Potential Claims with sufficient precision to conclude that it was unreasonable not to raise them in the Queensland Proceeding. However, that is to approach this application as if it were an adversarial proceeding where the Interested Respondents have the burden of proof, or at least of persuasion. As has been explained, it is not a proceeding of that kind. Rather, the point having been raised, it is for the Receivers to persuade the Court that the Potential Claims have been considered, perhaps in a legal opinion, and for articulated reasons the risk of those claims being shut out by the proposed settlement does not make that settlement unreasonable or imprudent. The Receivers have not undertaken that exercise.

80    In any event, the nature of the Potential Claims is clear enough to give rise to a concern: it is arguable (I put it no higher than that) that an officer of TETC directed O'Shea to transfer $2 million of that company's money to a different company where TETC received nothing in return. For the purposes of this judgment, the level of detail given in the description of the Potential Claims above is sufficient to address the risk of an Anshun point succeeding.

81    A second, related point made by the Receivers is that if TETC were to be a proper claimant under the Potential Claims, that may give rise to some inconsistency with the position taken by WFP in the Queensland Proceeding, where it asserts an entitlement to the Disputed Funds. But that is hardly a good reason for the Receivers, in their capacity as interim receivers of the property of TETC, to relinquish the ability of that company to make the claim (if that were indeed the outcome of the proposed settlement).

82    Thirdly, counsel for the Receivers submitted that a conclusion that the Queensland Proceeding could not be settled because of the Potential Claims would be 'in effect, a mandatory injunction compelling the interim receivers to then commence this broader claim'. I do not accept that characterisation. It is true that the Queensland Proceeding as presently constituted does not encompass any Potential Claim, and if that remains the case when the proceeding is concluded the Anshun risk will be present, whether or not the conclusion occurs by reason of discontinuance, or judgment after trial. But it does not follow that the Receivers will be compelled to commence any Potential Claim. After all, no analysis of the value of the Potential Claims has been conducted; as already mentioned, the HWL Ebsworth opinions do not approach them from that perspective. The question is whether the Receivers are presently justified in resolving the Queensland Proceeding so that the claims are potentially barred, without at least concluding that analysis.

83    A further point should also be acknowledged. One circumstance that might be relevant to the present case is timing; if the Queensland Proceeding is terminated now, before WFP or TETC have pleaded to the counterclaim, that may affect any assessment of reasonableness. But the Receivers did not rely on that point, and it would not be appropriate to determine it on a hypothetical basis in an application of the present case where the question under consideration is essentially one of reasonableness and prudence.

Conclusion

84    Were it not for the Potential Claims, I would have concluded that the proposed settlement is not imprudent, unreasonable or affected by any error of law or impropriety. If the issues currently raised in the proceeding are considered in isolation, the proposed settlement appears reasonable, because the amount of the Disputed Funds is relatively small and the legal costs of pursuing it are likely to be relatively large. Also, it is supported by considered written legal opinions provided by the Receivers' solicitors, on which it is reasonable for the Receivers to rely.

85    But those issues cannot be considered in isolation. The impact of the proposed settlement on the Potential Claims must also be addressed. The Anshun argument put by the Interested Respondents may or may not be correct; that is something that could only be determined if the Potential Claims were to be pleaded in a subsequent proceeding and the Anshun point taken in that proceeding. But contrary to the Receivers' position, the argument is not necessarily a misapplication of Anshun, for it is an application of the principle that has found favour in other courts.

86    Authorities such as Running Pigmy and Probert mean there is a real risk that if the Queensland Proceeding as presently constituted is settled, and a Potential Claim is brought subsequently, that claim will be held to have been barred by reason of Anshun estoppel. On balance, and in the absence of any analysis of the Potential Claims, I am not persuaded that it would be reasonable or prudent for the Receivers to run that risk. That is especially so when it is recalled that they have been appointed as temporary interim receivers only, with the main objective of preserving assets. They have no power to dispose of assets and no express power to compromise proceedings. It would be unfortunate if the settlement of the Queensland Proceeding currently proposed were to lead to the relinquishment of a much larger claim against O'Shea, by a sidewind and in the absence of full analysis and consideration. The Receivers were appointed on the basis that the bankrupt estate may have an interest in the assets of TETC and TEFT (among others). It is not in the interests of the creditors of the estate to risk losing the Potential Claims in the above circumstances.

87    While I am, with respect, willing to give weight to Mr Kirjuana's assessment of the advisability of settlement, as an experienced insolvency professional, it does not appear that the assessment takes account of the Potential Claims. The same may be said of the HWL Ebsworth opinions. On the state of the materials presently before the Court, I decline to order that the Receivers would be justified in proceeding with the proposed settlement.

Costs

88    While the application for directions has not been successful, it was appropriate for the Receivers to bring it and it is appropriate to confirm by order that the costs of the application form part of their remuneration and expenses which have previously been ordered to be paid out of the bankrupt estate.

89    There was a dispute about whether the form of costs order sought by the Receivers would operate as a charge over the assets. That dispute appears to be academic at present; more specific directions about the source of payment of the Receivers' remuneration and expenses can be sought at the appropriate time.

Associate:

Dated:    14 January 2026

SCHEDULE OF PARTIES